ARC NEWS
Cebu Pacific steadily restores capacity in complex Covid-19 era
December 10, 2020
Cebu Pacific Air has highlighted the bewildering array of coronavirus-related protocols as it works get passengers flying again. In a virtual media roundtable, Cebu Pacific head of commercial Alex Reyes says travellers confront “a very complex situation” when making a decision about flying. As with many airlines, Cebu Pacific has a page listing testing and other requirements for various destinations, but it is extremely difficult to keep it fully updated. “We try to capture all of the current regulations in place now,” he says. “It’s not perfect because the regulations are constantly changing…whether at the country level or even at the city level. They are constantly evolving and changing, as they react to the unique circumstances of their own locality.” More often than not, he says, people still opt to buy a ticket, but there are travellers that are put off by the complexity involved in booking a flight and dealing with the correct testing protocols. “I think the traveling public understands is that it is massively complex right now. Everyone is doing their part to try and make sure that yes, you can fly or no, you cannot fly. Or you get to fly as long as you do X, Y and Z.” The key is making the process “clear and transparent” to travellers. Covid-19 has hit the Philippines hard, including strict lockdowns earlier in the year that all but completely shut down air travel from mid-March to early June. According to the Johns Hopkins Coronavirus Resource Center, the country has 444,164 infections, second only to Indonesia in Southeast Asia. Nonetheless, Cebu Pacific has been working to restore flights after operating less than 10% of its domestic network from June to November. It is now operating 400-450 flights weekly to 28 domestic and eight international destinations. It has also relaunched services to leisure locations such as Bohol, Coron, Siargao, and Boracay. On international routes, the only service operating at normal, pre-Covid-19 capacity is Manila-Dubai, operated daily with an Airbus A330. The carrier recently increased frequencies to Nagoya and Seoul Incheon, and will restart flights to Taiwan on 18 December. Still, the low-cost carrier derived 66% of its third quarter revenue from cargo. It has converted an A330 for cargo work, and is carrying cargo on the seats of passenger aircraft. In addition, the airline is conducting a trial where passengers are tested at Manila’s Ninoy Aquino International Airport before flights to the southern city of General Santos. From 3 to 14 December, passengers will undergo a free antigen test prior to boarding their flight. Only passengers who test negative will be allowed to board. “It’s an approach we’re taking to assure the traveling public and local governments that we are not transporting any asymptomatic Covid-19 patients into their city or locality,” says Reyes. “It is another layer of protection to respond to the pandemic.” After analysing the results of the trial, the airline will consider rolling out the testing initiative on other flights.


​IATA presses governments to stimulate travel markets
December 09, 2020
IATA is urging governments to launch programmes that stimulate demand for air travel and help the aviation industry recover from the coronavirus crisis. Speaking on 8 December during the association's regular Covid-19 press call, IATA's director of global airport infrastructure and fuel Hemat Mistry argued that stimulus would enable fast recoveries from the crisis without the distortion to competition that can accompany support to individual airlines. Although airlines have been provided with around $173 billion in assistance since the onset of the Covid crisis, they are forecast to continue burning through $7 billion per month in the first half of 2021, making additional support necessary. IATA is keen to stress that this extra assistance should not contribute to airline's debt, which has ballooned amid the crisis. "With potential to safely reopen borders and revive travel with testing, governments will need to add measures that stimulate demand," states IATA chief executive Alexandre de Juniac. "Such targeted initiatives will help generate revenues, avoid adding debt to airlines, and immediately generate economic activity across the value chain." Asked whether governments are interested in the principle of market stimulation, Mistry responds that "in general they've been positive about this initiative". He adds: "When we try to explain this could lead to an earlier recovery of the industry, this is something that rings a bell." IATA has identified five ways that authorities could act to stimulate demand for flying. Firstly, governments could remove or reduce taxes, fees and charges, improving the affordability of air travel for passengers, and bolstering demand. Mistry cites the example of the US CARES Act, which suspended the domestic ticket tax, the flight segment tax and international arrivals and departures taxes, for an overall reduction of $18 per passenger. Other governments have taken action such as waiving visa fees. Route subsidies are another potential stimulus method. In addition to promoting demand for airlines, they can help restore tourism links and connect rural communities. IATA cites Cyprus's programme of providing between €7-17 per passenger if load factors fall below 41%-70%, with a maximum support per airline of €800,000 ($970,000). Since launching at the start of July, the scheme appears to have helped boost the numbers of flights and destinations being operated from the country, IATA says. Incentives for flight or seats to support operations with low yields or load factors are the third stimulus method identified by IATA. A Greek scheme in operation through April and May, under which the government provided €20 plus VAT for ever seat restarted at a total cost of €6 million, had the effect of kick-starting the recovery in air travel sooner than its peer countries, according to IATA. Elsewhere, even more interventionist approaches have been deployed. Hong Kong has purchased in advance 500,000 airline tickets from four home-based carriers, and plans to distribute them to locals and foreign visitors through a 'lucky draw'. The total cost of the scheme is $258 million, with the purchases "providing much needed liquidity to airlines", notes IATA. Such direct ticket purchases represent the fourth stimulus method identified by IATA. The fifth is travel subsidies in the form of vouchers or cashback on travel costs. This approach has been used by Thailand, where the government has subsidised domestic travel, launched a travel fund for healthcare workers and even provided discounts for hotel accommodation. The result was a "substantial" and sustained increase in domestic travel in June to July, says IATA.


Boeing resumes Max deliveries as United receives new jet
December 09, 2020
Boeing has resumed deliveries of the 737 Max, with United Airlines receiving an aircraft on 8 December, the carrier confirms. The delivery to United comes nearly 21 months after regulators worldwide grounded the 737 Max following two crashes. The US Federal Aviation Administration lifted the grounding on 18 November, requiring a series of software changes and setting new pilot-training standards. “We took our first Max delivery since the grounding,” United says. The airline adds that it “will inspect every aircraft, require our pilots to undergo additional training reviewed and approved by the FAA, and conduct test flights before we bring these aircraft back into service”. “We expect to start flying the Max in the first quarter of next year,” United adds. Boeing defers comment to United. The Chicago airframer, airlines and the FAA insist changes made to the jet have eliminated the possibility of another accident being caused by the same sequence of events that contributed to two previous crashes. Those accidents killed 346 people. United has 14 737 Max already in its fleet and another 170 of the jets on order with Boeing. Boeing has an inventory of some 450 undelivered 737 Max, and executives have said the company hopes to deliver half of those within about one year.


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